Kazakhstan, which is one of the world's most influential countries by Bitcoin (BTC) mining hashrate share, has yet again tightened regulations for industry participants.
Kazakhstan launches electricity auctions for miners
Didar Bekbauov, co-founder of Xive all-in-one cryptocurrency mining solutions platform, shares the details of new regulations approved by the Majilis, the lower house of Kazakhstan's Parliament. The package of five bills imposes a new scheme of electricity purchasing for mining equipment, as well as updated licensing and taxation schemes.
1/9— Didar (@didar_bekbau) December 7, 2022
New crypto regulations in Kazakhstan. Again.
The Majilis approved the bill "On Digital Assets of the Republic of Kazakhstan", as well as four related bills on the regulation of digital mining in Kazakhstan
With new rules approved, miners can only purchase electricity from the public grid if there is a surplus - and exclusively through KOREM (Kazakhstan Electricity and Power Market Operator), which acts as an exchange platform. Miners need to participate in auctions, and only the highest bid wins.
Also, two separate types of licenses are now imposed: the first one is required for miners with own equipment, while the second one is for those who are lending the hardware.
Deputy Ekaterina Smyshlyaeva highlighted that the new regulations are aligned with informational security policies:
The bill, in addition to mandatory accreditation, introduces separate requirements for mining pools in terms of the location of their server capacities in Kazakhstan and compliance with information security rules.
Besides that, new taxes are imposed for all participants of cryptocurrency mining operations in Kazakhstan.
New taxes imposed, crypto advertising ban is in sight
Both single miners and mining pools will be eligible for corporate income tax based on the value of the product (cryptocurrency) and the commission rates for the pools.
Then, individuals that execute cryptocurrency transactions will be required to pay a value-added tax, while cryptocurrency exchanges will pay regular corporate income tax.
Also, the Majilis is considering a complete ban on advertising cryptocurrency transactions and special regulations for "cryptocurrency securities."
As covered by U.Today previously, Kazakhstan was among the preferred destinations for miners who left China in Q2-Q3, 2021, after the PRC witch-hunt on crypto accelerated. According to various sources, the country might be responsible for 14-18% of net Bitcoin (BTC) network hashrate.